Ola to foray into the used-car retailing business with Ola Cars
Ola is looking to expand beyond its ride-hailing business and step into other territories. According to a report by Entracker, Ola is on the verge of launching a used-car retailing business in Bengaluru. According to the report, this news comes from three people aware of the details regarding this new line of business. This is also the first major product launch for the Bengaluru-based Ola in the last two years. “Ola is likely to enter the segment with a full-stack model where it will buy cars from people and the company’s driver-partners and sell them to buyers after glitches are removed,” said one of the sources told Entracker.
The sources sad that Ola has already started building a team for the new vertical and is going to start a pilot in Bengaluru by the second half of August. “The senior management at Ola sees it as a complementary business model to its core business — mobility,” said another source and added that the used-car business is going to be called “Ola Cars”.
This new business venture is going to see Ola compete with companies like Spinny, Cars 24, and CarDekho. While Spinny has been in the business for a while, CarDekho has forayed into the space recently, and Cars24 is also in the game for a while now. The market for used cars is only expected to grow further. As per an AutoCar report, the number of used cars in India may touch 8.2 million in FY25 as compared to the 3.8 million used cars in FY21.
Ola’s new plans also come in at a time when the company’s ride-hailing service business has “plateaued” because of the pandemic. According to sources, it is unlikely that Ola’s cab vertical, along with the bike and auto verticals have actually registered significant growth in the past two years.
Ola is also preparing for a public listing and recently raised $500 million in a pre-IPO round from Warburg Pincus and its co-founder Bhavish Aggarwal and Temasek.
Ola has claimed a strong recovery post the second Covid-19 wave but experts tracking the mobility space “estimate that Ola and Uber are still some distance away from regaining their pre-Covid peak”. In May last year, Ola had to slash a significant portion of its workforce as its revenues declined by 95% due to lockdown.